Zenith Bank Plc and the International Finance Corporation (IFC), a member of the World Bank Group, have announced an investment of $100 million to help increase support to clients and Companies, whose cash flows have been disrupted by the COVID-19 pandemic. The IFC’s loan to Zenith Bank is its first investment in Africa through its COVID-19 fast-track financing support package.
IFC says the funding would help Zenith Bank overcome challenges resulting from ongoing limited access to foreign currency, working capital, and trade funding. The bank will use the funds to support dozens of businesses in Nigeria’s health, pharmaceuticals, food, and trading sectors, allowing them to strengthen operations, maintain employment, and access critical imports of goods, commodities, and raw materials during these challenging economic times.
Ebenezer Onyeagwu, Group Managing Director, Zenith Bank, says: “IFC’s support is essential and will help us respond to challenges resulting from the COVID-19 pandemic. It will allow us to support compelling export initiatives and trade financing for critical goods and materials, especially for the medical and pharmaceuticals sectors. Our partnership with IFC is strong and we are committed to its environmental, social, and governance (ESG) requirements.
“IFC’s loan to Zenith is part of its $8 billion global fast-track financing package, announced in March to support business activity and preserve jobs in the face of COVID-19. Close to 300 clients have requested support globally. The closure of borders, shutting of businesses, and reduced global trade-related to COVID-19 are affecting Nigeria’s economy and others across Africa, with the World Bank predicting Africa’s first recession in 25 years.”
Eme Essien Lore, IFC Country Manager in Nigeria, adds: “IFC’s support for Nigeria’s banking sector will help keep the wheels of Nigeria’s economy turning at a time when it is facing a major challenge from COVID-19. Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting economic damage.”
Shareholders of African Export-Import Bank (Afreximbank) have voted to re-appoint Prof. Benedict Oramah as President of the Pan-African multilateral financial institution for a second five-year term. He was first appointed in 2015.
The decision was announced June 14, 2020 in Cairo following Afreximbank’s 27th Annual General Meeting of Shareholders held by circulation of resolutions due to the COVID-19 pandemic situation.
In an acceptance statement released shortly thereafter, President Oramah told Shareholders that the Bank’s ultimate goal under his second term of office is the realisation of Africa’s strategic ambition to create an integrated market.
Says Pof. Oramah: “We want an Africa where the foundations of the African Continental Free Trade Agreement (AfCFTA) are laid expeditiously so that the 84,000 kilometres of borders that have divided us for ages can begin to come down.”
Prof. Oramah adds that AfCFTA would “drive the industrialisation of Africa, support the emergence of regional value chains, turn Africa’s creative and cultural assets into engines of growth, grow jobs for the continent’s youth, convey respect to Africans wherever they may be and better prepare the continent to compete more effectively in the global markets.”
Prof. Oramah recalls that between 2015 and 2019, Afreximbank disbursed more than US$30 billion in support of African trade with over US$15 billion channeled towards the financing and promotion of intra-African trade, adding: “We will aim to double intra-African trade financing so that by the end of my term, it will constitute no less than 40% of the Bank’s total assets, with aggregate disbursements, on a revolving basis, over the 5 years exceeding US$30 billion.”
A resolution proposing the re-election of Mr. Stefan-Luis Francois Nalletamby as a Director representing Class “A” Shareholders and Mr. Kee Chong Li Kwong Wing as a Director representing Class “B” Shareholders was equally approved by the meeting.
The 2019 audited accounts and the proposal to raise an additional US$500 million in equity within Afreximbank’s current Strategic Plan dubbed “IMPACT 2021-Africa transformed” were also approved. The approval to raise additional equity is in recognition that an amount of US$1 billion earlier authorised to be mobilised had almost been fully raised.
President Oramah assures the Bank’s Shareholders, saying: “I make a commitment that with your support, the Bank will remain well capitalised throughout my term of office and beyond. We will continue our efforts to diversify sources of equity to include the markets while ensuring that the Bank’s development focus remains unchanged.”
FATE Foundation and BudgIT surveyed Micro, Small and Medium Enterprises in Nigeria amid the Covid-19 pandemic, aiming to drive stakeholders in the ecosystem to engage in urgent interventions to enable businesses thrive during and after COVID-19.
Here are its key findings:
Overall Impact: The report analyses responses from 1,943 Micro, Small and Medium Enterprises (MSME) across Nigeria’s 36 states and the Federal Capital Territory (FCT). It shows that 94.3% of businesses surveyed reported being negatively impacted by the pandemic, particularly in their Cash flow, Sales and Revenue.
Surviving the Pandemic: The report shows that despite the negative impact of the pandemic, about 47% of the respondents were positive that their businesses will survive the pandemic. About 22% are unsure and 30% report that their businesses will not survive.
Cash flow Constraints: A significant number of the businesses had cash flow challenges, with 13% indicating enough cash flow to run operations for one to three months. About 33% had enough cash flow to stay operational for only one to four weeks, and about 27% for only one to seven days.
Jobs: Jobs were impacted as 82.8% of the businesses reported were likely to lay off one to five employees.
Opportunities: Close to 50% of the businesses were able to identify opportunities along the lines of creating new products and services, expansion and diversification, etc. Most businesses reported need for support with cash flow, sales, funding and access to markets.
Recommendations: The report makes key recommendations to government, enterprise support organisations, and private sector and development sector stakeholders on the design and implementation of policies and programmes that provide funding and business support for MSMEs. It calls for targeted policy interventions that enable their resilience, and promote the survival of such vulnerable segments as micro enterprises, women entrepreneurs and young entrepreneurs.
To read the full report, click here: Impact of Covid-19 on Micro, Small and Medium Enterprises in Nigeria
Introduction: Following the health and economic emergencies caused by the COVID-19 pandemic, His Excellency, President Muhammadu Buhari established the Economic Sustainability Committee (ESC) on March 30, 2020.
Membership of the Committee: Membership of the Committee consists of:
(i) His Excellency, the Vice President;
(ii) Hon. Minister, Finance, Budget & National Planning;
(iii) Hon. Minister of State, Budget and National Planning;
(iv) Hon. Minister, Industry Trade & Investment;
(v) Hon. Minister, Labour and Employment;
(vi) Hon. Minister of State, Petroleum Resources;
(vii) Governor, Central Bank of Nigeria;
(viii) Group Managing Director, NNPC; and
(ix) Permanent Secretary, Cabinet Office – Secretary
Other Ministers Co-opted:
(i) Hon. Minister of Agriculture & Rural Development;
(ii) Hon. Minister of Humanitarian Affairs, Disaster Management & Social Affairs;
(iii) Hon. Minister of Works & Housing;
(iv) Hon. Minister, Aviation;
(v) Hon. Minister, Communication & Digital Economy;
(vi) Hon. Minister, Education;
(vii) Hon. Minister, Health;
(viii) Hon. Minister, Interior;
(ix) Hon. Minister, Science & Technology; and
(x) Hon. Minister of Transportation.
Terms of Reference:
(i) Develop a clear Economic Sustainability Plan in response to challenges posed by the COVID-19 Pandemic;
(ii) Identify fiscal measures for enhancing distributable oil and gas revenue, increasing non-oil revenues and reducing non- essential spending, towards securing sufficient resources to fund the plan;
(iii) Propose monetary policy measures in support of the Plan;
(iv) Provide a Fiscal/Monetary Stimulus Package, including support to private businesses (with emphasis on strategic sectors most affected by the pandemic) and vulnerable segments of the population;
(v) Articulate specific measures to support the States and FCT;
(vi) Propose a clear-cut strategy to keep existing jobs and create opportunities for new ones; and
(vii) Identify measures that may require legislative support to deliver the Plan.
Consultation of Other Stakeholders:
Consultation with the Presidential Economic Advisory Council (EAC): Apart from the FEC Members and Agency CEOs consulted by the Committee, the ESC also met with the members of the Presidential Economic Advisory Council and subsequently exchanged correspondence with them on the policy thrust and some particular aspects of the draft Sustainability Plan, including its implementation strategy.
Briefing of State Governors: As members of the National Economic Council and major stakeholders, State Governors were fully briefed on how the implementation of the Plan would necessarily entail their full collaboration, especially the mass agriculture, mass housing, broadband connectivity, domestic solar projects, etc. The Governors also submitted their views and contributions to the development of the Plan.
Consultative Session with the leadership of the National Assembly: The Senate President and Speaker of the House of Representatives led principal officers of the National Assembly in meeting with members of the ESC. After the draft Sustainability Plan was presented to them, the legislators commended its strategic approach and made some recommendations, which are to be taken into consideration in implementing the plan.
Other Plans Incorporated in the Proposed Economic Sustainability Plan:
(i) The Economic Recovery and Growth Plan (ERGP)
(ii) Report of the Economic Crisis Committee (headed by the Hon. Minister of Finance, Budget & National Planning)
(iii) The Finance Act 2019; and
(iv) Central Bank of Nigeria (CBN) Proposals.
Basis Of The Plan:
Immediate Challenges of the COVID-19 Pandemic: The COVID-19 pandemic has created severe Economic consequences for all countries around the world. Nigeria has also been very badly hit. The lockdowns have frozen economic activities, causing massive job losses and supply chain disruptions. It has also depressed the demand for crude oil and precipitated an unprecedented oil price crash. Nigeria’s dependence on oil for revenue and foreign exchange makes it particularly vulnerable in this situation.
It is expected that if oil prices average $30 over the rest of the year, oil revenues (assuming Nigerian National Petroleum Corporation reduces Joint Venture operating costs by 20%), would amount to about N88.4 billion monthly. Assuming that non-oil revenues are sustained at the lower level projected in the revised budget estimates, the total allocations to FAAC for the rest of the year would then be around N485 billion a month. This time last year total allocations to FAAC was N669.9 bn monthly. The very steep decline in revenues available for sharing among governments of the federation will have serious implications for wages, overheads and capital expenditures at Federal, State and Local Government levels.
Unemployment rate which was 23.1% (or 20.9m people) at the end of 2018 is expected to rise to 33.6% (or 39.4 million people) at the end of 2020, if urgent steps are not taken. The major problem with unemployment of a very large youth population is the hopelessness that gives rise to criminal activities and anti-social behavior, which can ultimately create potential recruits into the ranks of insurgents.
Even for those able to earn a living, the situation is dire. The NBS recently released a household survey of poverty in Nigeria, a five-year study which showed that over 40% of Nigerian households earn less than N137,000 per annum. This is barely N11,000 per month. With the COVID crisis, this poor income will drop much further.
Given these indices, the National Bureau of Statistics (NBS) projects that economic growth could fall by as much as minus 4.40% to minus 8.91% depending on the length of the lockdown period, the potency of the economic plans that are put in place, and, in particular, the amount of stimulus spending.
The time-tested approach to fighting a recession is a stimulus package. The size of the stimulus package will usually determine how shallow or deep the recession would turn out to be. We asked the NBS to give us a model of what the macro implications of four scenarios would be if we had the good fortune for oil prices to average at $30 per barrel in 2020.
(i) Scenario 1: With no stimulus, i.e., if we simply stick to our budget the economy will decline by minus 4.40% at best.
(ii) Scenario 2: With a stimulus of just N500 billion, the economy will decline by minus 1.94%.
(iii) Scenario 3: With a stimulus of N2.3 trillion, the economic decline will be lower at minus 0.59%.
(iv) Scenario 4. With a stimulus of N3.6 trillion there will still be negative growth but only of -0.42%
Given our low level of revenues and the importance of monetary stability, we settled for a stimulus package of N2.3 trillion, which raises the question: How will this funded? This amount will be funded by N500bn from Special Accounts, N1.11 trillion of CBN structured lending and N302.9bn from other funding sources.
The second issue is the strategy. We decided that the best way to beat the triple problem of very low foreign exchange, huge unemployment and negative growth is by focusing on Mr. President’s mantra to produce what we eat and eat what we produce.
This meant focusing on agriculture, increasing the acreage under cultivation and engaging thousands of young people in farming and agro-allied jobs, with a scheme for guaranteeing off-take of farm produce. This ensures that farmers are assured of an income. Other signature programmes include mass social housing, using local materials, installing solar power in 5 million homes, and providing assistance to daily-paid and self-employed workers – petty traders, artisans like bricklayers, vulcanisers, and electricians as well as commercial drivers and barrow-pushers.
Many businesses have suffered severe losses due to the lockdowns and have had to decide on laying off staff, we have developed a strategy to ensure that as many as possible do not collapse and are able to retain their staff. For other businesses – aviation, hotels , private schools, restaurants, finding it difficult to continue making loan repayments to banks, we have developed a scheme for the restructuring of their loans. For the extremely poor and vulnerable, we have increased support available under the Social Investment Programme.
General Objectives of the Plan:
(i) To stimulate the economy by preventing business collapse and ensuring liquidity;
(ii) Retain or create jobs using labour intensive methods in key areas like agriculture, facility maintenance, housing and direct labour interventions;
(iii) Undertake growth enhancing and job creating infrastructural investments in roads, bridges, solar power, and communications technologies;
(iv) Promote manufacturing and local production at all levels and advocate the use of Made in Nigeria goods and services, as a way of creating job opportunities, achieving self-sufficiency in critical sectors of our economy and curbing unnecessary demand for foreign exchange which might put pressure on the exchange rate; and
(v) Extend protection to the very poor and other vulnerable groups – including women and persons living with disabilities – through pro-poor spending.
This plan is based on three pillars:
The first pillar consists of “Real Sector Measures”, and comprises a mix of project and policy approaches, which focus on the creation of jobs across the fields of agriculture and agro- processing, food security, housing construction, renewable energy, infrastructure, manufacturing and the digital economy. The aim is to safeguard existing micro, small and medium scale businesses while ramping up local productive capacity by encouraging opportunities for innovation in the various sectors.
The second, “Fiscal and Monetary Measures”, outlines steps that will be taken to maximise government revenue, optimise expenditure and enshrine a regime of prudence with an emphasis on achieving value for money. The overriding objective is to keep the economy active through carefully calibrated regulatory interventions designed to de-risk the environment for local production and enterprise, galvanise external sources of funding, rationalise existing debt obligations and boost investments in strategic sectors affected by the COVID-19 pandemic, while supporting the financial viability of State Governments.
The “third pillar is Implementation”. This is the key to the success of the plan. Each Minister will be responsible for supervising the implementation of plans situated in their Ministry through a ministerial implementation Committee chaired by the Minister. The Ministerial Committee will be responsible for ensuring synergy between stakeholders, especially the public and private sector. The Committees shall also drive the execution of specific projects, coordinate the entire sectorial value chain and ensure resolution of bottlenecks impeding implementation. The Economic Sustainability Committee, which is an inter-Ministerial Committee, will be responsible for general oversight of implementation and will report to the President. Expenditure will be monitored through the National M&E Framework and the Budget Office of the Federation.
Proposed Key Projects: Key projects put forward by relevant Ministries to sustain economic activity, boost production, create the maximum number of jobs possible and save foreign exchange include –
(i) A Mass Agricultural Programme: This is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every State of the Federation. The aim is to create millions of job opportunities, directly and indirectly, over a 12-month period. A significant number of Nigerians will be incentivised to engage in farming and agro-processing, as that is a field in which Nigeria has comparative advantage. The Hon Minister of Agriculture and the CBN Governor have agreed a detailed plan of action in this regard.
(ii) Extensive Public Works and Road Construction Programme (focusing on both major and rural roads) As the country cannot afford to continue with the importation of bitumen for road construction, emphasis will now be on the use of locally available materials like limestone, cement and granite. Options have been explored for using these materials in major Federal highways. Similarly, a significant number of workers can be engaged in the construction of rural roads using stones and other materials available locally. The Hon. Minister of Works and Housing is developing the engineering concept and template for this approach in order to assist the Ministry of Agriculture and Rural Development, which is responsible for rural roads.
(iii) Mass Housing Programme: This programme is expected to deliver up to 300,000 homes annually, engaging young professionals and artisans who form themselves into small and medium scale businesses within the construction industry. Such enterprises will use indigenous labour and materials working on dedicated housing sites. For instance doors, windows and other materials will be produced, finished or assembled at mass housing construction sites. Also, home designs can be standardised and costed with economies of scale in mind to ensure their affordability. Bouncing Back: Nigeria Economic Sustainability Plan 13 For the construction of houses to continue uninterrupted across the country, the Federal Ministry of Works and Housing, CBN and the Family Homes Fund (under the Ministry of Finance) are making arrangements for purchase through cooperatives and for warehousing of completed houses, which will then be mortgaged or let out on rent-to-own basis.
(iv) Installation of Solar Home Systems: The proposed Solar Home Systems Project will cover up to 5 million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid. In view of the scale of materials required, solar equipment manufacturers will be required to set up production facilities in Nigeria, thereby offering additional job opportunities to Nigerians. In addition, installation, servicing and payment collections are expected to provide thousands of other jobs.
(v) Strengthening the Social Safety Net: This will be achieved through an increase in the number cash transfer beneficiaries, N-Power volunteers and sundry traders enjoying small and micro loans through the MarketMoni and TraderMoni schemes. The preexisting conditional cash transfer will be extended to cover mostly the rural poor. However, on account of the current lockdown, most of the urban poor, artisans, labourers, petty traders, street vendors, cart pushers, have become further impoverished.
(vi) Support for Micro, Small & Medium Enterprises: Implementation of a scheme to support business activities of MSMEs through guaranteed off take of items like personal protective equipment, face shields, face masks, hand sanitizers, shoe covers, soaps, etc. In this regard, we expect to catalyse massive investments in light manufacturing, which will ensure that many common articles of everyday use are made in Nigeria to acceptable standard.
(vii) Reduction in NAFDAC registration fees: Practical support has also been initiated for MSMEs as an immediate response to support resilience. In this regard, the National Agency for Food and Drug Administration and Control (NAFDAC) has implemented an 80% reduction of its product registration charges and total waiver of administrative charges for product license renewals.
(viii) Survival Fund: This is to give payroll support to small and medium-sized enterprises so that they can keep their employees and help maintain jobs.
(ix) Promotion of Domestic Gas Utilisation: To take advantage of Nigeria’s abundant gas resources, which is also cheaper and more friendly to the environment, this project will promote indigenous manufacture of gas cylinders, building of gas filling stations and conversion of cars to promote the wide use of compressed natural gas in the domestic market.
(x) Digital Technology: To foster a culture of innovation and create a wide variety of technology and ICT jobs, special attention will be paid to the promotion of technology hubs, call-centres for business process outsourcing and digitisation of processes, both in Government and within the private sector. Experience thus far indicates that, if well harnessed, this is a sector that can create jobs on a large scale and earn foreign exchange for the country.
It is further envisaged that a range of measures must be necessarily taken to undergird the implementation of the Plan, enhance service delivery and build resilience in the post- COVID-19 economy. These measures include:
(i) Digital identification of every Nigerian, this will help improve the provision of cash transfers and other benefits;
(ii) Broadband connectivity to help school children access digital education across the entire country;
(iii) Local production of all that we can: shoes, steel fabrication, ceramics, plastics, furniture and building materials;
(iv) Promoting strategic investment in the local manufacture of generic medicines to reduce importation of expensive drugs;
(v) To establish a national research fund for medicine and pharmaceuticals funded by contributions from TETFUND and Corporate Social Responsibility expenditure of private companies;
(vi) To promote the uptake of the FGN Savings Bond to encourage all Nigerians to save a portion of their income no matter how small.
To read the full report, click here: Nigeria Economic Sustainability Report 2020
The Ecobank Group has reiterated its commitment to the ‘100,000 MSMEs by 2021’ programme of the African Union Development Agency (AUD) and the New Partnership for Africa’s Development (NEPAD).
Ade Ayeyemi, Chief Executive Officer of Ecobank Group, speaking at the second virtual workshop facilitated by McKinsey on June 11, 2020, confirmed Group’s support in building the digital platform, developing content for the MSME Academy and participating in lending to Micro, Small and Medium Enterprises (MSME) in Africa.
High level representatives from the African Union Commission, regional development banks, development financial institutions, international organisations and African commercial banks agreed to establish the AUDA-NEPAD programme during the session.
AUDA-NEPAD and Ecobank Group will work with like-minded African institutions and businesses to utilise the platform for monitoring and benchmarking, thus allowing members and MSMEs to share experiences, best practices, national policies and challenges, and support African businesses and economies with resources to overcome the challenges posed by the Covid-19 pandemic.
The AUDA-NEPAD MSME programme will have five pillars: AUDA MSME Academy, MSME Financing Support Programme, MSME Marketplace, MSME Micro-Health Insurance Scheme and MSME Digital Platform. These pillars are designed to ensure that African MSMEs are supported to become more resilient, improve their market access and take advantage of technology to tap into the African market of 1.3 billion consumers and leverage the Africa Continental Free Trade Agreement (AfCFTA).
Dr. Ibrahim Assane Mayaki, Chief Executive Officer of AUDA-NEPAD commended the stakeholders for designing the “100,000 MSMEs by 2021” programme, and emphasised the need for them to support the private sector in Africa, to protect employment and create the 440 million jobs the continent will need by 2030.
The AUDA-NEPAD programme will pool African resources, capabilities, financing, market access and technology, to help achieve a continental response to Micro, Small and Medium Enterprises.
The African Export-Import Bank (Afreximbank) released its audited financial statements in Cairo, Egypt on Wednesday, for the year ended December 31, 2019. It recorded a gross income of $1.1 billion.
The result indicates a 29.7 percent growth in gross income in 2019, compared to $813.9 million 2018, and moves Afreximbank above the $1 billion income mark for the first time.
This performance, reflecting a net income of $315.3 million and a 14.3 percent increase over the 2018 performance of $275.9 million, is mainly attributed to a higher operating income of $622.5 million compared to $489.8 million in 2018.
Afreximbank grew its total assets by 7.6 percent, from $13.42 billion on December 31, 2018, to $14.44 billion as at December 31, 2019, resulting mainly from growth in net loans and advances.
Afreximbank president, Prof. Benedict Oramah, noting that the bank’s performance exceeded its strategic plan target in spite of the economic uncertainties of the global operating environment, says: Afreximbank continues ‘‘to deliver the objectives of its current five-year strategic plan, dubbed IMPACT 2021, by prioritising initiatives aimed at promoting and financing intra-African trade.”
Regarding concerns of the Covid-19 and the likelihood of a global recession, Prof. Oramah says Afreximbank is taking steps to manage the impact of the pandemic on loans and advances to customers, adding: “Afreximbank is making arrangements to support its member countries in need.”
Afreximbank has earlier announced a $3-billion Pandemic Trade Impact Mitigation Facility (PATIMFA) to help African countries deal with the economic and health impacts of the COVID-19 pandemic. The facility, approved by the Bank’s Board of Directors at its sitting on March 20, 2020, will assist member countries to adjust to shocks caused by Covid-19 to their financial, economic and health services, support member country central banks and other financial institutions in meeting trade debt payments that fall due, and help them to stabilise their foreign exchange resources.
The facility will also assist member countries whose fiscal revenues are tied to such export revenues as mineral royalties to manage sudden fiscal revenue declines resulting from reduced export earnings and provide emergency trade finance facilities for import of urgent needs to combat the pandemic, including medicine, medical equipment and hospital refitting.
The facility is available through direct funding, lines of credit, guarantees, cross-currency swaps and similar instruments.
The Central Bank of Nigeria (CBN) introduced the N50 billion Targeted Credit Facility (TCF) stimulus package to support households and micro, small and medium enterprises (MSMEs) affected by the COVID-19 pandemic. The guidelines outline the operational modalities for the Scheme.
The broad objectives of the CBN N50 billion Targeted Credit Facility are:
i. Cushion the adverse effects of COVID-19 on households and MSMEs.
ii. Support households and MSMEs whose economic activities have been significantly disrupted by the COVID-19 pandemic.
iii. Stimulate credit to MSMEs to expand their productive capacity through equipment upgrade, and research and development.
Eligible beneficiaries are:
i. Households with verifiable evidence of livelihood adversely impacted by
ii. Existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic.
iii. Enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic.
Eligible activities under the Scheme are:
i. Agricultural value chain activities.
ii. Hospitality: Accommodation and food services.
iii. Health: Pharmaceuticals and medical supplies.
iv. Airline service providers.
v. Manufacturing/value addition.
vii. Any other income-generating activities as may be prescribed by the CBN.
The Scheme shall be financed from the CBN’s Micro, Small and Medium Enterprises Development Fund (MSMEDF).
NIRSAL Microfinance Bank (NMFB) is the eligible participating financial institution for the scheme.
The loan amount shall be determined by the activity, cash flow and industry/segment size of the beneficiary, subject to a maximum of N25 million for SMEs.
Households can access a maximum of N3 million.
Working capital shall be a maximum of 25 percent of the average of the preceding three years’ annual turnover. Where the enterprise is not up to three years in operation, 25 percent of the previous year’s turnover will apply.
The interest rate under this intervention shall be Five percent per annum, all-inclusive, up to February 28, 2021. Thereafter, interest on the facility shall revert to Nine percent, all-inclusive, with effect from March 1, 2021.
Working capital shall be for a maximum period of one year, without an option for rollover.
Term loan shall have a maximum tenor of not more than three years with, at least, one-year moratorium.
The collateral to be pledged by beneficiaries under the programme shall be as may be acceptable by NIRSAL MFB, and may include any one or more of the following:
i. Moveable asset(s) duly registered on the National Collateral Registry (NCR).
ii. Simple deposit of title documents, in perfectible state.
iii. Deed of Debenture (for stocks), in perfectible state.
iv. Irrevocable domiciliation of proceeds.
v. Two acceptable Guarantors.
vi. Personal Guarantee of the promoter of the business.
vii. Life Insurance of the Key-Man, with NMFB noted as the First Loss Payee.
viii. Comprehensive Insurance over the asset.
Repayment shall be made on an installment basis by the beneficiaries to the NMFB according to the nature of the enterprise, and the repayment schedule/work plan provided at the application stage.
Eligible households or MSMEs shall:
i. Submit applications directly to NIRSAL Microfinance Bank (NMFB).
ii. Application must, among others, contain BVN number, business registration (where applicable) and business plan with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic.
iii. NMFB shall appraise and conduct due diligence applications.
iv. Upon satisfactory appraisal of the application, NMFB shall forward the application to the CBN for final approval.
v. The CBN reviews applications and gives final approval for disbursement to NMFB.
A corporate entity shall submit an application to NMFB with:
I. Clear evidence of the opportunity or adverse impact as a result of the COVID-19 pandemic.
ii. NMFB shall appraise and conduct due diligence on each application.
iii. Upon satisfactory appraisal of the application, NMFB shall forward the application to the CBN for final approval.
iv. The CBN reviews applications and gives final approval for disbursement to NMFB.
Periodic monitoring of projects financed under the Scheme shall be conducted by the NIRSAL MFB.
The CBN shall:
i. Provide the seed fund for the scheme.
ii. Release funds to NIRSAL MFB for disbursement to successful applicants.
iii. Review the guidelines of the facility as may be necessary.
iv. Receive and process periodic returns from NIRSAL MFB.
v. Monitor and evaluate the implementation of the scheme by NIRSAL MFB.
NIRSAL MFB shall:
i. Validate the status and BVN of the applicants.
ii. Process and disburse funds to approved beneficiaries.
iii. Maintain records of beneficiaries and disbursements.
iv. Forward periodic returns on the prescribed format on the scheme to the CBN.
v. Comply with the guidelines.
vi. Carry out any other duties as the CBN may prescribe from time to time.
The exit date of this intervention is December 31, 2024.
This framework shall be reviewed from time to time, as may be deemed necessary by the CBN.
All inquiries and returns should be addressed to: Director, Development Finance Department, Central Bank of Nigeria, Abuja.